Clarification regarding deduction under Section 80 CCD(pension scheme)

F.No. 275/192/2009-IT (B) New Delhi Dated the 9th February, 2010. Sub: Clarification regarding deduction in respect of contribution to pension scheme under Section 80 CCD – matter reg.             A number of representations have been received regarding deduction under Section 80 CCD for contribution made under pension scheme in the light of Circular No-1 /2010 dated 11th Jan’2010 issued on the subject of Deduction of Tax at Source etc.            It is clarified that in accordance with the provisions of Section 80 CCD, deduction in respect of contribution made by an individual in the previous year to his account under a pension scheme notified, is allowed in computation of his total income – (a) in the case of an employee, ten per cent of his salary in the previous year; and (b) in any other case, ten per cent of his gross total income in the previous year. 2. It is further clarified that where the Central Government or any other employer makes any contribution to the account of employee for the pension scheme, the assessee shall also be allowed a deduction in the computation of his total income of the whole of the amount contributed by the Central Govt. or any other employer as does not exceed 10% of his salary in the previous year. 3. Salary for the purpose of above section (80 CCD) includes dearness allowance if the terms of employment so provide, but excludes all other allowances and perquisites. 4. It is further clarified that aggregate limit of deduction under this section (80 CCD) along with Sections 80 C, 80 CCC shall not in any case exceed Rs. one lakh. Yours faithfully, (Ansuman Pattnaik) Director (Budget) To, All DDOs of Central Government, State Governments, CAG & other persons as per standard list Read more ...

Tax info books

Tax Info Booklets   as amended by Finance Act 2008 House Property T.D.S. on Salaries FBT Hindi Compute Capital Gains Trusts and Institutions TDS Other than Salaries - Vol I TDS other than salaries - Vol II Valuation of Perquisites Filing_Your_Tax_Return Taxation of Salaried Employees Read more ...

Downloads e-forms

Download eForm Description e-Form with Instruction kit e-Form Form for filing Balance Sheet and other documents with the Registrar Form 23AC Form 23AC Form for filing Profit & Loss Account and other documents with Registrar Form 23ACA Form 23ACA Form for filing Annual Return by a Company having a share capital with the Registrar of Companies Form 20B Form 20B Form for submission of Compliance Certificate for Companies with Paid Up Capital between Rs. 10 lakh to Rs. 5 crore. Form 66 Form 66 Particulars of Annual Return of the company not having share capital Form 21A Form 21A Read more ...

Annual eFiling

As a part of Annual eFiling, Companies incorporated under the Companies Act, 1956 are required to efile the following documents with the Registrar of Companies (RoC): Sr. No. Document e-Form 1 Balance-Sheet Form 23AC to be filed by all Companies* 2 Profit & Loss Account Form 23ACA to be filed by all Companies 3 Annual Return Form 20B to be filed by Companies having share capital 4 Annual Return Form 21A to be filed by companies without share capital 5 Compliance Certificate Form 66 to be filed by Companies having paid up capital of Rs.10 lakh to Rs. 5 crore Read more ...

savings a/c will fetch you more interest

The absence of TDS will be a big draw for high net worth individuals, who have been parking short-term surpluses in mutual funds. Interest income of over Rs 10,000 earned from bank fixed deposits per annum is taxed at the rate of 10%. But interest income over Rs 10,000 each year earned from savings account will not be taxed.                       Since returns on these deposits are not subject to tax deduction at source (TDS), high net worth individuals may choose these accounts over other short-term instruments such as mutual funds and term deposits, banks reason.                      The interest on savings accounts remains unchanged at 3.5%, depositors will earn more interest income from these accounts from 1st April ,10. Notification : Sub:Payment of Interest on Savings Bank Account on a Daily Product Basis  RBI/2008-09/452 DBOD. No. Dir. BC.128/13.03.00/2008-09 April 24, 2009   All Scheduled Commercial Banks (Excluding RRBs)   Dear Sir   Payment of Interest on Savings Bank Account on a Daily Product Basis   Please refer to paragraph 88 of the Annual Policy Statement announced by Governor on April 21, 2009 (extract enclosed), in terms of which it has been proposed that payment of interest on savings bank accounts by scheduled commercial banks would be calculated on a daily product basis with effect from April 1, 2010. In terms of extant guidelines, as per paragraph 2.2B of the Master Circular dated July 1, 2008 on Interest Rates on Rupee Deposits held in Domestic, Ordinary Non-Resident (NRO) and Non-Resident (External) (NRE) Accounts, banks have been advised that in the case of savings deposits, interest should be calculated on the minimum balance to the credit of the deposit account during the period from the 10th to the last day of each calendar month and credited to the account only when it is Re.1/- or more. Several banks had suggested that interest on savings bank accounts may be calculated either on the minimum balances in the deposit accounts during the period from the first to the last day of each calendar month or on a daily product basis. The matter was referred to the Indian Banks' Association, which was of the view that payment of interest on a daily product basis would be feasible only when computerisation in banks is completed. 2. We advise that on a review, and in view of the present satisfactory level of computerisation in commercial bank branches, it is proposed that payment of interest on savings bank accounts by scheduled commercial banks would be calculated on a daily product basis with effect from April 1, 2010. In order to ensure a smooth transition, banks may work out the modalities in this regard.   Yours faithfully     (P. Vijaya Bhaskar) Chief General Manager   Encl: as above Read more ...

penalty without PAN

Any income received if you are unable to provide your permanent account number from 1St Apr, The tax deducted at source, or TDS, on payments could be as high as 20% for those not quoting PAN against the regular rate of 2%-10%.                   The Budget 2009-10 had made it mandatory for residents and non-residents to quote this number or face a higher rate of withholding tax. It comes into effect from Thursday, April 1.                   Senior citizens could just file Form 15H in absence of tax liability and become eligible for exemption from TDS. If they do not furnish a PAN they will have to face a TDS rate of 20%.                      The new rule comes with a severe penalty if not followed. Any failure to deduct taxes at appropriate rates will result in disallowance of expenditure for the one making payment, recovery of tax from him, and levy of interest and penalty.                    T he PAN is required to be quoted in document pertaining relating to sale of property, sale or purchase of a motor vehicle requiring registration other than two-wheelers. Most of the banking transactions require PAN to be quoted. Read more ...

Tax plannings

Target full utilisation of Section 80 C:       Maximum deduction available is to the tune of Rs 100,000. Assess your income to arrive at the amount you need to invest in this section. The investment avenues include; Public Provident Fund (PPF) up to Rs 70,000, National Saving Certificate (NSC), Life Insurance or ULIP premium, tuition fees paid for children's education (2 children max), Equity linked savings schemes (ELSS), Post office saving deposit (POSD) and five year fixed deposits with banks among others. For individuals in the higher income bracket, section 80 C which is the most popular one may not be sufficient to reduce overall tax liability. Here is where the other sections will play a key role in reducing tax outflow. 2. Interest on home loan: Individuals intending to buy a house should consider opting for a home loan. Interest payments up to Rs 150,000 pa are eligible for deduction under Section 24. 3. House Rent Allowance (HRA): You can take advantage of this if you are renting an accommodation. There are set guidelines determining the amount deductible. Please note that the rent agreement and the rent receipts need to be submitted. 4. Health Insurance Premium: Annual deduction of Rs 15,000 is permissible for self, spouse and dependent children. Also and additional Rs 15,000 is allowed for parents. 5. Medical reimbursement: Medical treatment expenses up to Rs. 15,000 can be claimed annually as deduction from salary u/s 17(2). Actual bills need to be produced. 6. Donation to Charitable institutions: Subject to the stated limits, donations to specified funds/institutions are eligible for tax benefits under Section 80G. Receipt needs to be produced. 7. Interest paid on educational loans: Deduction can be claimed on interest paid on educational loans taken for higher education of you, your spouse and children under section (u/s) 80 E. There is no limit on the amount of deduction you can claim. However, the loan should be taken for a graduate or post-graduate program in engineering, medicine or management or a post-graduate course in the pure or applied sciences. 1. Section 80 C allows deduction of tuition fees spent on children's education. 2. If you want to pay rent to your parents or relatives (kindly note this arrangement cannot be done with your spouse), you will need to treat them as landlords and request the owner of the house to declare it in his/her personal income tax return. 3. The maturity proceeds of life insurance policies are not taxable. 4. Conveyance allowance up to maximum of Rs 800 can be claimed per month as deduction from salary u/s 10(14). 5. Long term capital gains on listed shares/securities are not taxable. 6. Capital gains on sale of house property can be avoided by purchasing another house property within two years after or one year before date of sale. 7. Stamp duty charges and registration charges paid while purchasing new house is eligible for tax deduction under Section 80 C. The first step in the direction of tax saving is to assess your tax liability. So start the process so that you can then decide on what all to opt for to save maximum taxes. Tax incentives are given to encourage savings/ investments. Savings form part of your overall financial plan which in effect means tax planning is a subset of financial planning. Your financial plan will set objectives for you based on your aspirations, your life style, your age group, size of family etc. The question you need to ask yourself is, "Did you adhere to your financial plan while investing in an instrument for tax saving purposes?" Well if your answer to that is "yes", then you're moving in the direction of attaining your financial goals. If not, it's time for you to take corrective action. The damage may have been done for the past year but the forthcoming is an opportunity for you to plan well. Remember, procrastination is the thief of time. So if you postpone it now, this year will be no different from the last one.     Read more ...